Las Vegas and other U.S. cities are currently facing a noticeable downturn in tourism, marked by significant drops in hotel occupancy and travel demand. Joining the likes of Houston, New Orleans, Phoenix, San Francisco, Oakland, San Diego, and San Jose, Las Vegas finds itself grappling with challenges that threaten both its iconic status as a travel destination and the broader hospitality industry.
Las Vegas Loses Its Shine as Visitor Numbers Drop Sharply
Las Vegas, once the epitome of American leisure and entertainment, has seen a drastic decline in hotel occupancy. June 2025 marked an alarming 14.9% year-over-year drop in room bookings, which further plummeted to just 66.7% in early July. Summer losses could hit around 20% compared to the same timeframe in 2024. The repercussions have sent waves of concern throughout the hospitality sector, especially since Las Vegas heavily relies on revenue from midweek conventions and weekend getaways.
The decrease in international arrivals, particularly from Canada, and a slump in business traveler demand significantly contribute to this downturn. Domestic tourists are becoming increasingly budget-conscious, often opting for cost-effective or more flexible destinations. As promotional campaigns unfold and properties remain operational, Las Vegas faces an uphill battle to maintain its reputation as a leading travel hub.
California’s Tourism Divide Widens: San Francisco Climbs While Others Stall
In California, the tourism landscape presents a dichotomy. While San Francisco is experiencing a burgeoning revival with a 72.2% occupancy rate in June—up 17.2% year-over-year—other cities such as San Diego are struggling. San Diego recorded a hotel occupancy rate of only 71.6% in June, which reflected a 13.8-point drop from the previous year. Though a slight uptick in early July brought the rate to 81.2%, inconsistencies signal a delicate recovery within these leisure-dependent markets.
The fluctuations in San Diego’s occupancy can be largely attributed to an unpredictable business travel scene and dwindling convention bookings. As many travelers exercise caution around discretionary spending, weekdays remain notably underbooked, leading to disappointing revenue projections. Without improving weekday occupancy, San Diego’s recovery trajectory for the fall remains uncertain.
On the flip side, San Francisco’s success stems from a robust influx of international travel, substantial downtown events, and a consistent stream of corporate attendees. This relative stability illustrates how localized tourism recovery can significantly vary, even within a single state.
Houston Hotels Hit Rock Bottom: The Worst-Performing City
The summer slump has struck Houston, recording the most significant decline across U.S. cities. By mid-July 2025, hotel occupancy plummeted by 20.0% year-over-year, reaching a mere 57.7%. Alongside this, the average daily rate dropped to $114.55, alongside a staggering 34.2% decrease in revenue per available room (RevPAR).
Houston’s troubles are linked primarily to weak convention business and a decline in corporate travel, exacerbated by a scarce lineup of summer events. As a key player in the conference market, the city is reassessing its promotional strategies to revitalize tourism, but the road to recovery looks steep without a significant anchor in events.
New Orleans Faces Bleakest Summer Yet
In New Orleans, the summer of 2025 marks a dismal period, with the city suffering the lowest hotel occupancy performance among major U.S. markets at just 53.8% in June. While the Big Easy typically thrives on its vibrant festivals and cultural happenings, this year has witnessed a reduced event calendar, leading to decreased visitor numbers.
Declines in international flights and domestic spending contribute to the grim outlook. Shorter stays, lower per-night rates, and a lack of group bookings have left hotel operators wary of a prolonged sluggishness. Absent a major resurgence, such as prominent festivals or large conventions, New Orleans’ tourism sector may remain subdued.
Phoenix Struggles Through Heat and Empty Rooms
Similarly, Phoenix reported a challenging summer, with hotel occupancy falling to 59.5% in June. Historically, the city attracts summer travelers looking for adventure or affordable options, but record-high temperatures combined with weak convention activities have deterred visitors this season.
The city’s reliance on budget-conscious tourists has turned into a vulnerability, especially as inflation pressures household budgets. As vacationers shy away from summer trips, the hospitality industry in Phoenix faces mounting pressure to sustain its growth during a pivotal season.
America’s Urban Tourism: A Nation in Decline
The patterns seen in Las Vegas, Houston, New Orleans, and Phoenix illustrate a concerning trend: a nationwide cooling in tourism that primarily affects urban centers. While cities like San Francisco show encouraging signs of recovery driven by strong corporate and international interests, they represent a rare exception in a landscape dominated by declines.
Travel experts emphasize the urgency for local tourism boards to act swiftly—implementing targeted promotions, securing events, and exploring innovative markets—to combat this downturn before it escalates into a longer-term struggle for the hospitality industry. As summer vacations wane and fall approaches, a proactive approach becomes crucial to revitalize travel and tourism in these affected urban hubs.